Tax Rate 32.50% 32.50% 32.50% 32.50% Market Value of Debt or D 0 22589 45178 67766 Market Value of Equity or E 643773 628516 613259 598002 Market Value of Capital 643773 651105 658437 665768 BL 0.85 0.87 0.89 0.91 Risk Free Rate 5.20% 5.20% 5.20% 5.20% Risk Premium 5.10% 5.10% 5.10% 5.10% Cost of Equity (Re) 9.5% 9.6% 9.7% 9.8% Pre-Tax Cost of Debt 6.16% 6.16% 6.16% 6.16% Post-Tax Cost of Debt 4.16% 4.16% 4.16% 4.16% Weight of Debt 0.00% 3.47% 6.86% 10.18% Weight of Equity 100.00% 96.53% 93.14% 89.82% WACC 9.5% 9.4% 9.4% 9.3% 22.1 29.13 643.773
Effect of use Debt on CPK's Value
Debt Proportion (in US$'000) Actual 10% 20% Tax Rate 32.50% 32.50% 32.50% Book Value of Debt or D 0 22.589 45.178 Value of Lefered Firm 643.773 651.114425 658.45585
Debt Boost ROE
Debt Proportion (in US$'000) Actual 10% 20% Total Equity 225,888.00 203,299.00 180,710.00 Net Profit 20,299.00 19,359.00 18,419.00 ROE (%) 8.99% 9.52% 10.19%
Effect of use Debt on Shareprice
Debt Proportion (in US$'000) 10% 20% 30% Book Value of Debt for purpose of 22,589,000.00 45,178,000.00 67,766,000.00 share repurchase Shares can be repurchased at US$ 1.02 2.04 3.07 22.10 per share (in million) Current Outstanding Shares (in 29.13 29.13 29.13 million) New Outstanding Shares (in million) 28.11 27.09 26.06 Market Value Equity (in US$'000) 628516 613259 598002 New Shares Price 22.36 22.64 22.94
Effect of use Debt on Economic Value Added
Debt Proportion (in US$'000) Actual 10% 20% EBIT 30,054.00 30,054.00 30,054.00 Tax Rate 32.50% 32.50% 32.50% NOPAT 20286.45 20286.45 20286.45 Book Value of Debt or D 0.00 22,589.00 45,178.00 Book Value of Equity or E 225,888.00 203,299.00 180,710.00 Invested Capital 225,888.00 225,888.00 225,888.00 WACC 9.54% 9.45% 9.35% Economic Value Added (EVA) -1,251.97 -1,051.94 -840.99
Effect of use debt on EPS
Debt Proportion (in US$'000) Actual 10% 20% Net Profit 20,299.00 19,359.00 18,419.00 Shares Outstanding (In Million) 29.13 28.11 27.09 Earning Per Share $ 0.70 $ 0.69 $ 0.68 P/E Ratio $ 31.71 $ 32.09 $ 32.50 30% 32.50% 67.766 665.79695